Exit and Growth Strategies for Middle Market Businesses

The report below gives a good overview of the third quarter M&A activity in the Consumer Retail Industry Sector. M&A activity for North American based target companies in the Consumer and Retail sector for Q2 2018 included 90 closed deals, according to data published by industry data tracker FactSet.

One of the notable middle market transactions closed in June when Fairfax Financial Holdings Ltd acquired Toys “R” Us Ltd, trading as Toys “R” Us (Canada) Ltd from Toys “R” Us, Inc. for CAD300 million (US$237.9 million), via bankruptcy. The acquisition is in line with the growth strategy of Fairfax Financial Holdings. The transaction was subject to customary closing conditions, including remaining court and applicable regulatory approvals. Toys “R” Us is located in Concord, Ontario and retails toys, games and electronics for children.

Driven in large part by the ubiquity of Amazon, retail dollars seem to be on a continuous trend toward leaving storefronts for the online giant.

Industry Indicators

Total US consumer spending, an indicator of retail sales, rose 2.3%, primarily from nondurable goods expenditures, in April 2018 compared to the same month in 2017.

Total US retail sales, a measure of the retail sector, increased 5.5% in the first six months of 2018 compared to the same period in 2017.

US tourism spending on shopping, which impacts retail sector revenues, increased 3.6% in the third quarter of 2017 compared to the same period in 2016.

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